AG, Partners settle on deal to allow South Shore Hospital merger

Wednesday

Jun 25, 2014 at 6:00 AMJun 25, 2014 at 12:24 PM

The deal, if approved by a judge, would allow Boston-based Partners to acquire the 378-bed Weymouth hospital as well as Harbor Medical Associates, a group of 65 South Shore physicians, and Hallmark Health, which has two hospitals north of Boston. The terms of the deal spelled out in a 92-page filing are similar to a summary Coakley outlined last month.

Christian Schiavone The Patriot Ledger @CSchiavo_Ledger

BOSTON – The attorney general’s office has settled on a deal to allow Partners HealthCare to acquire South Shore Hospital despite objections from Partners’ competitors, at least one of which is considering legal action to try to stop the deal.

Attorney General Martha Coakley’s office on Tuesday filed the agreement in Suffolk Superior Court and asked a judge to set a hearing date for Friday or Monday.

The deal, if approved, would allow Boston-based Partners to acquire the 378-bed Weymouth hospital as well as Harbor Medical Associates – a group of 65 South Shore physicians – and Hallmark Health, which has two hospitals north of Boston.

The terms of the deal spelled out in a 92-page filing are similar to a summary Coakley outlined last month.

South Shore Hospital and Partners would have to agree to limit price increases to the rate of inflation for 61/2 years. Partners would also need approval from the attorney general’s office to acquire any additional hospitals in eastern Massachusetts, including Worcester County, in the next seven years, excluding Emerson Hospital in Concord.

Other restrictions would limit the number of new doctors Partners can add and give insurance companies more flexibility to negotiate with Partners.

In a statement, Coakley said the restrictions in the deal would do more to rein in the health care giant’s growth and increasing clout than blocking its acquisition of South Shore Hospital.

“While a lawsuit could have blocked Partners’ expansion to South Shore Hospital, it also would have maintained the unacceptable status quo in the health care market,” she said in the statement. “Today’s resolution goes well beyond that by reducing the negotiating power of Partners, limiting its ability to acquire physicians, and controlling costs across its entire network.”

Coakley’s office announced a tentative deal May 19 and said it would have to be filed in court by June 16, but the negotiators missed that deadline. Coakley said if a deal was not reached, her office would sue to stop the deal.

Spokespeople for Partners and the hospital said Tuesday that they were pleased with the latest step.

Partners spokesman Rich Copp said the deal will bring more coordinated care to the South Shore.

Under the deal, Partners would also have to cover the attorney general’s $1.3 million tab for reviewing the proposal and pay for an independent monitor to make sure Partners abides by the rules for 10 years.

But not everyone was pleased to see the deal moving forward.

Dr. Guy Spinelli, chairman of the board of Atrius Health and president of Granite Medical Group in Quincy, said the deal would solidify Partners’ dominance even under the price and growth caps, and allow it to potentially draw doctors away from other practices.

“We’re really and deeply upset by this and feel that we really need to speak out,” Spinelli said. “We cannot understand why the attorney general is rushing this agreement and has chosen to ignore many, many calls for a public process to review a deal that will affect the market in Massachusetts.”

Spinelli said Atrius is looking at options to challenge the deal in court.

Atrius was one of more than a dozen of Partners competitors that earlier this month called on Coakley to have a chance for the public to weigh in on the plan before it went to court. Others in the group included Beth Israel Deaconess Medical Center, which has hospitals in Milton and Plymouth; Tufts Medical Center in Boston; and Signature Healthcare Brockton Hospital.

Partners and South Shore Hospital announced their plan to merge in 2012. The proposed merger has received wide support locally, including endorsements from the mayors of Weymouth and Braintree and from business and labor leaders. But the state’s Health Policy Commission recommended against the deal, saying it would drive up costs and crowd out competition without improving care on the South Shore.

Christian Schiavone may be reached at cschiavone@ledger.com or follow him on Twitter @CSchiavo_Ledger.